An audit that unearthed $3.5 million in wasted funds at the Timpanogos Mental Health Center in central Utah also gave the Davis County Mental Health system a clean bill of health, county officials said Tuesday.

Davis County Commissioner Bill Peters said state auditors are even recommending that some of the Davis programs, including financial safeguards, be adopted by the other mental health centers around the state.Peters, who oversees the county's human services programs, said he met Tuesday afternoon with state auditors and they gave the county's program "a clean bill of health."

When he asked the auditors to submit a letter pointing out where improvements could be made, Peters said, they told him if he really wants one they will but the suggestions "would be insignificant."

Staff members from the legislative auditor general's office dug through records from the Timpanogos Center, which serves Summit, Wasatch, and Utah counties; the Davis center; Bear River Mental Health, which serves northern Utah; and Salt Lake Valley Mental Health, serving Salt Lake County.

The report concluded nearly $3.5 million in state, local and federal funds has been misappropriated by the Timpanogos administrative staff over the past four or five years.

Auditors said they "found none of the abuses existing at Timpanogos Mental Health Center at these other centers."

Peters said the audit shows in Davis County the funds are being properly spent on clients and programs and "are not being short-stopped along the way" for excessive administration costs.

Dr. Russell Williams, the Davis mental health director, said he's afraid people will misunderstand the findings of the audit and con-clude erroneously that because money was diverted, it is not needed by mental health clients.

Davis County has a waiting list of about 125 potential clients who need its services, Williams said.

He noted the Davis center has a good accounting system and excellent checks and balances to monitor expenditures such as service contracts, travel expenses and credit card usage.

Monthly reports are filed with the center's board of directors, Williams said, which also heads off problems.

Peters said one problem area the audit found in Timpanogos was credit card abuse, with administrative staffers running up a $400,000 bill on one card for travel and personal purchases.

The Davis center has only one card, Peters said, which is used only for travel expenses. All billings are checked and approved monthly by three or four different people.

Overtime pay abuse was also cited in the audit. Williams said his program rigorously double checks overtime pay, breaking it down into 15-minute time blocks for accountability. His program spent a little over $70,000 on overtime pay in 1987, Williams said.

Contracts for services by individuals to Davis County Mental Health are approved by three different people and payments must be approved by four people before a check is written, Williams said.

Williams also said the Davis policy does not allow mental health employees to get a separate service contract with the center in addition to their base salary.